Your IndustryMay 25 2016

Brits won’t pay more than £50 an hour for advice

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Brits won’t pay more than £50 an hour for advice

A large proportion of wealthy UK investors aged 40 plus would not be prepared to pay anything for advice, research by Legg Mason has found.

The survey, which polled more than 5,000 high net worth investors around the world, found 60 per cent of UK investors aged 40 plus place little or no value on the services of investment advisers.

It found 39 per cent said they would never pay any amount for financial advice, while a further 21 per cent said they would pay no more than £50 per hour.

This is just a third of the average hourly rate for a financial adviser, which according to a survey by Unbiased is £150.

More than three years after the introduction of the Retail Distribution Review it appears that the majority of wealthy investors over 40 are not prepared to pay the going rate. Adam Gent

Adam Gent, head of UK sales at Legg Mason, said: “More than three years after the introduction of the Retail Distribution Review it appears that the majority of wealthy investors over 40 are not prepared to pay the going rate – if anything at all – for investment advice.

“That is a surprise given this demographic is the best placed to pay for advice in a fee-based environment, suggesting many investors continue to undervalue the services of investment advisers.”

The survey did find millennials seem to be far more open to paying for investment advice, with more than half prepared to pay more than £150 an hour and less than one in 10 unwilling to pay any amount.

British millennials also have more trust in professional financial advice, with 88 per cent having trust in their financial adviser, ahead of the global average of 87 per cent and the European average of 83 per cent.

Last year website Money.co.uk commissioned One Poll to survey 669 over-55 year olds with a pension and found that just one fifth would be willing to pay for advice, dropping to just 13 per cent of men.

On average, those planning to make a withdrawal from their pension pots told the Money.co.uk they would be willing to pay just £253 for advice.

Adviser View

Graeme Inglis, director of Fife-based Create and Prosper Financial Services, said: “As a firm we disclose our fees up front and you do have the odd client who will not proceed because there are fees involved.

“Clients are now made aware they are paying a fee compaed to the old commission days but I would view that as a positive thing.”